Allen Iverson Earned Over $200 Million In His Career. Now He's Reportedly Broke.

[The_Ripper]

Allen Iverson – who has earned over $154 million in salary alone over his stellar NBA career — is broke. That number excludes his tens of millions more in non-salary income, including a $50 million lifetime endorsement contract from Reebok. And the player best known as “the Answer” has no easy answer for the bills, including around $859,000 he currently owes to a Georgia jewelry store (too bad he didn’t have Newt’s credit line at Tiffany’s). He made the Iverson equivalent of pilaf to play in Turkey and was offered plantains to play in Puerto Rico. Now comes an insulting offer to play indoor soccer for the Rochester Lancers. It’s a sad and shameful denouement for a man who, pound-for-pound on his six foot, 165-pound frame, is the most gifted and fearless guard to ever play pro basketball.

Most sports fans saw this day coming. Some will point to Iverson’s role in a controversial bowling alley brawl in Hampton, Virginia back when Iverson was in high school. Though Iverson ended up serving four months in prison for the crime, Georgetown coach John Thompson — in his defining Lawrence Phillips moment — overlooked the incident in recruiting Iverson, and Virginia governor Doug Wilder eventually granted Iverson clemency. Fairly or unfairly, the affair tainted Iverson’s reputation and telegraphed his later troubles.

Perhaps the telltale indicator of Iverson’s divorce from financial reality, however, was an anecdote I received via a former teammate of Iverson’s from his days with the Philadelphia 76ers. This player, raised on a far higher standard of fiduciary responsibility, was amused and stunned by “A.I.’s” money habits. He related how on many road trips Iverson refused to carry baggage, evidently seeking to remain as unencumbered from physical things as he was of basketball defenders. Because of this habit, Iverson would buy a full selection of new clothes, shoes, and other expensive items at each new destination with rolls of cash he carried on his person. Moreover, upon departure, he would leave all those goodies behind in his hotel room or just give them away.

The Forbes education writer in me can’t help but draw painful lessons from Iverson’s financial behavior. For instance, I calculate that even if Iverson had passively invested (say, in a broad-based index fund like SPY) only half of the more than $200 million he reportedly made over the past sixteen years, and wantonly squandered the rest, the amount he invested would have at least kept pace with inflation. I am not talking hedge funds or sexy IPOs. I am talking large-cap staples of the American economy, with no vig at all to the money management sharks, Ponzi schemers, and private equity shysters that circle pro athletes and their posses. A high-rated, tax-free, long-term municipal bond ETF like MLN might even be safer, if not always more profitable.

As I learned when my beloved mother — an accumulator of seemingly expensive things – suddenly passed, most material things don’t carry much resale value. Yet celebrities in general, and pro athletes in particular, think they do. Blinged-out, overly customized, and hard-to-resell mansions, diamond-studded watches, Gulfstream jets, fur coats, cheesy overpriced jewelry, and the requisite Bentley’s all lose their value over time. Cars, no matter what the brand, lose value as soon as they are driven off the lot. Same goes for planes. In only rare cases does a watch grow in value. Ditto for jewelry, especially garish jewelry. The best and safest way to grow money over the long-term is through investing in dividend-paying stocks. Boring? Yeah. Not very “street.” But, as a former German girlfriend once told me, “To be radical in your art, you need to be safe in your life.”

As much as I admire Iverson as a player and even enjoy his inimitable, incorrigible bad boy charm, it is still a tragedy that someone in his expansive network of takers, enablers, handlers, and sycophants did not at some point pull the point guard aside and be a genuine financial friend. And I don’t mean the lecture that all rookies receive that 60% of NBA players are broke within five years of leaving the game. That lecture is obviously not working. A genuine financial friend would have spoken ongoing, unvarnished, personal truth: lose the lottery mindset, dump the hangers-on, drop the traveling hair stylist, and, instead, start saving and investing wisely. A bona fide financial friend would have done the difficult thing and gotten the league or the players union to hold Iverson’s paychecks in escrow.

Moreover, an NBA that cared more about its personnel and brand would have required that Iverson, as well as all players, pass a yearly financial planning and retirement course before they were allowed on the hardwood (including how to read a financial statement, why to run from promises of a “guaranteed” return, and how a rock-solid prenup, living will and family planning can prevent you from getting soaked by a gold-digging ex).

Now, Allen Ezail Iverson is broke, his wages garnished, his Wells Fargo bank account out of his control. Moreover, those fifty or so “friends” and “family” that lived off, or milked, Iverson’s naive generosity are running for cover. As of today, Allen Iverson joins the unholy pantheon of all-time-profligate sports spendthrifts – from Derrick Coleman to John Daly, Sheryl Swoopes to Mike Tyson, to Diego Maradona, Latrell Sprewell to George Best – who each squandered a king’s ransom because of a lack of financial education and the desire to pursuit it.

[Javii]

How fucking hard is it to hire a financial adviser for these idiots?

[The_Ripper]

take a look @ this article:
http://sportsillustrated.cnn.com/vault/article/magazine/MAG1153364/1/index.htm

[Javii]

Yeah, they've made bad investments.  That's where a financial adviser can say, "Foo, stop trying to start a million businesses and hope one hits"

[rayallen0]

It amazes me that he can't get enough sponsors to make atleast another million to live off of? I know i would still buy his shoes if he had a brand. Dude influenced alot of people's game into being much better ball handlers.

[DJ SUGAFREE QUIK]

How fucking hard is it to hire a financial adviser for these idiots?

I agree.  But then again some financial advisers can steal from their clients like T.Hoe's F.A. did to him.  Same could be said for these rich athletes & celebrities to pay for a cab or limo when they're plastered so they don't get stopped by the cops or be dead in a crash.  But OH NO, ITS TOO DIFFICULT

Me, myself & Iverson has this problem with the bling, changing his race to graffiti & not making his posse work so they don't gravy train him.  Cause most of them won't be around when the cash flow no longer is.

[Hack Wilson - real]

iverson has nobody else to blame, just himself

remember when he kicked his girlfriend out in the cold naked?

[Chamillitary Click]

How fucking hard is it to hire a financial adviser for these idiots?

You need a financial adviser to help you save $200 million dollars? You can spend $100 million & still have $100 million laying around in the bank collecting interest.

It's astonishing when this happens. Shame it had to be to my boy.

[rayallen0]

iverson has nobody else to blame, just himself

remember when he kicked his girlfriend out in the cold naked?

Wife and most likely bitch cheated on him. Good thing he has some balls to do that and not try to fix shit like a lot of pussy celebs.

yes you do need an adviser, he payed a shit load of taxes and then when you have that much money you get to thinking "oh like it matters if i get a 500K chain."

[7even]

Most likely also a posse thang. Nigga probably financed a luxury drug and flossin' life for dozens of his boys... lots of niggas be leeching of dumb niggas from the hood who don't want to move on to friends with money. Good luck trying to make a living playing in the D-League, nigga.

[rayallen0]

couldn't he get payed for doing b straight to dvd movies? Can't be any worse than Rodman or Shaq.

[The_Ripper]

The free-shooting Philadelphia 76er amassed more than $154 million from his NBA salary alone. Throw in his Reebok shoe deal, smaller endorsements, business deals, and other opportunities to cash in on his fame, and you have an impressive nine-figure empire -- but one that quickly disintegrated to less than zero.

Hard to imagine, perhaps, but it's easy to explain when you realize that Iverson broke the cardinal rule of budgeting: Never live beyond your means.

We Should've Seen This Coming

There were already signs that Iverson was in over his head financially in 2010. He had just left the 76ers after a brief return to his original team. When he wanted to get back in the game, no NBA teams were interested in his seemingly diminished talents.

"It's not about money or anything like that," he told reporters before heading off to play basketball in Turkey later that year. It probably was.

"The 76ers' former all-everything guard is broke -- by all accounts except his own," wrote Philadelphia Inquirer beat reporter Kate Fagan as she flew into Istanbul to check in on Iverson's new gig, playing home games in an arena with room for just 3,200 fans.

In their prime, some athletes believe that fame will last forever. They don't seem to realize that there aren't enough sports broadcasting jobs for all retired the superstars. They don't think about how endorsements will dry up after they're through lighting up the scoreboard.

In the end, there's no such thing as making too much money if your financial planning amounts to an air ball at the buzzer. There's also no such thing as making too little money -- within reason -- if you're smart enough to budget accordingly.

The Sting of Skipping Practice

One of Iverson's most colorful moments came after his team was bounced out of the playoffs in 2002. His coach criticized A.I.'s tendency to miss team practices.

"We're sitting here -- I'm supposed to be the franchise player -- and we're in here talking about practice," Iverson began in a rant that went viral. "We're not even talking about the game, when it actually matters. We're talking about practice."

Iverson did practice. All NBA players practice hard while they are in their prime. (How else can they stay that way?) However, mocking the value of practice was perhaps a cruel case of foreshadowing the fate that would befall him a decade later.

Basketball players repeat the basics -- over and over -- even after they become second nature. If Iverson had practiced the adage of living beneath his means, he certainly wouldn't be in the predicament he finds himself in today with his bank account seized and any future wages garnished.

Iverson had it wrong. Practice matters. Practice is as important as the game itself.

Buzzer-Beaters

Iverson had every right to live a rich life. His entourage often numbered in the dozens. When you're making millions a year, no one is going to tell you that you can't spring for bottle service at a nightclub's VIP room or take the buddies out to throw money around at a casino where the odds are always stacked in the house's favor.

No one tells a multimillionaire that he can't buy fine jewelry for his wife, family, and friends, and friends of friends.

The problems arise after the lifestyle they grow accustomed to ceases to be financially feasible. When you buy a mansion -- or several opulent pads -- no one reminds you that each of those properties will cost a fortune to maintain and that property taxes are based on their outrageous market values.

Should I save money? Invest money? Realize that a childhood friend may not be the best source for sound business advice? These questions don't seem to require answers when the money's rolling in. Traveling to road games with a personal hairstylist -- as Iverson reportedly did -- doesn't seem so outrageous when you're the NBA's scoring leader.
Then the buckets -- and the buckets of money -- stop coming.

Fact is, living beneath your means isn't enough. You have to live beneath your future means -- and save enough along the way so that those $860,000 checks to the jeweler don't bounce.

[Hack Wilson - real]

iverson has nobody else to blame, just himself

remember when he kicked his girlfriend out in the cold naked?

Wife and most likely bitch cheated on him. Good thing he has some balls to do that and not try to fix shit like a lot of pussy celebs.

yes you do need an adviser, he payed a shit load of taxes and then when you have that much money you get to thinking "oh like it matters if i get a 500K chain."

no excuse

he can easily just be like Soopafly and smack the bitch up a few times

[Javii]

How fucking hard is it to hire a financial adviser for these idiots?

You need a financial adviser to help you save $200 million dollars? You can spend $100 million & still have $100 million laying around in the bank collecting interest.

It's astonishing when this happens. Shame it had to be to my boy.

You don't "need" a financial adviser, but I'd do it.  Just to be on the safe side.  If I somehow win the lottery that's what I'm going to do lol. 

[rayallen0]

iverson has nobody else to blame, just himself

remember when he kicked his girlfriend out in the cold naked?

Wife and most likely bitch cheated on him. Good thing he has some balls to do that and not try to fix shit like a lot of pussy celebs.

yes you do need an adviser, he payed a shit load of taxes and then when you have that much money you get to thinking "oh like it matters if i get a 500K chain."

no excuse

he can easily just be like Soopafly and smack the bitch up a few times

...i would say  throwing her out naked is better than smacking her....